Cover Story: Most business leaders are in the dark about the impact of automation on staff

Last week NAB kicked off its latest wave of job cuts billed as part of a restructure to “simplify” the bank. It’s part of a three-year plan announced in 2017 to axe 6000 jobs while adding 2000 new technology roles.

“As we simplify, we automate processes and things move to digital channels, we will need less people and as that happens we estimate that there will be 6000 less people needed in three years’ time,” NAB CEO Andrew Thorburn explained when announcing the cuts late last year.

“Having said that, we’re hiring 2000 people with different capabilities: data scientists, AI, robotics, automation, technology people, digital people, so the net [job loss] will be 4000 and that’s just a reshaping that’s going to happen.”

As machines learn how to perform tasks that would otherwise be done by humans, businesses will find themselves needing fewer staff to complete the same amount of work. It was ever thus.

But while change is easy to predict, understanding the impact on their future workforce remains a mystery to most planners.

According to a survey of 200 CEOs and Chief HR Officers conducted by CEB (which was acquired by Gartner last year) both groups believe 14 per cent of jobs will be automated over the next three years. But almost three quarters said they either don’t have a strategy to address the impact of automation or the strategies that they do have are insufficient to address the associated risks.

Developing those strategies is keeping global consulting firms busy. It is also giving rise to forecasting and analytics tools designed to shed light on how businesses can augment their workforces with technology.

For example, Australian technology start-up Faethm has launched a SaaS platform called Tandem which uses expert forecasting and machine learning to predict the impact of emerging technologies on skills and roles in an organisation, industry or geography.

“Automation projects are often underway without a complete understanding of the impacts on the workforce,” Miller said.

“In many companies, automation is a board-level discussion and priority, but strategic workforce planning isn’t. This needs to change, as the two go hand in hand.”

According to Alphabeta, the average Australian worker experienced two hours of automation in their working week between 2000 and 2015, and on current trends will experience another two hours of automation over the next 15 years.

Richard Coleman has had long stints as the leading safety and HR executive at organisations including Asciano, Telstra and Boral. Now as the CEO of The Interchange, a consultancy focused on creative cultural change, he studies and advises of the real-world impact of automation on both the bottom line and on the workforce.

“While lots of HR functions and CHROs will spin you a merry tale about the depth of their workforce planning — how it’s tightly connected to strategy and with clear line of sight of emerging technology — it’s really not true,” Coleman told Which-50.

What’s more common, Coleman says, is HR will deliver headcount reductions as a result of cost-cutting initiatives and then business units will look to automation to plug the gaps. Or jobs will be lost once technology starts to bite.

“Excess headcount as a result of technology is an issue that businesses tend to slowly realise, particularly if they are incumbents doing reasonably well,” he said.

Coleman said he is particularly interested in how technology can be deployed to enrich and augment roles.

“As CEO of this business I’d be rapt to have 25 per cent of the mundane stuff I do automated. It will let me focus on growth and my team.”

Competitive advantage or cliff dive

Setting aside the moral and social obligations businesses have to their employees, there are economic incentives for organisations to pay close attention to people and automation. Ignoring the issue, meanwhile, could lead large-scale job cuts and difficulties recruiting in-demand skills.

“Australian companies need to take advantage of all the automation opportunities that are in front of them in order to stay competitive locally and globally,” Miller said.

If we get it right automation could significantly boost Australia’s productivity and national income — potentially adding up to $A2.2 trillion in value to our economy by 2030, according to a report produced by Alphabeta.

The Automation Advantage, which was produced by Alphabeta and commissioned by Google, found only nine per cent of Australia’s listed companies are making sustained investments in automation, compared with more than 20 per cent in the United States and nearly 14 per cent in leading automation nations globally.

“This low rate of investment in automation technology acts as a handbrake on our productivity growth that will ultimately reduce our national income,” the authors wrote.

In Miller’s view, there are huge opportunities to augment your workforce with technology to boost productivity and add new capabilities.

“If we fail to recognise one opportunity of current skills and capabilities that employees exercise that could be automated, there’s a real risk you’ll fail to capitalise on those opportunities,” Boomer told Which-50.

“Or you’ll reach a cliff where there are individual elements of jobs that have been automated and reached that tipping point and a whole lot of jobs will no longer be relevant or there won’t be enough to make up a whole job.”

“So you’ll be left with getting rid of a lot of people. And it would be expected that employee engagement and satisfaction would suffer from that as well.”

How to plan for the future

Amit Bansal, the managing director for the applied intelligence at Accenture, says the consultancy advises clients to focus on the tasks — not jobs — employees perform that can be automated to map out what skills organisations will and won’t need in the future.

“At face value you can work out what sort of skills you’ll need for the next 12 months and the next 24 months,” Bansal told Which-50.

“Our view is that jobs will be reconfigured rather than removed and displaced. New jobs will be created — what you also need to think about is the job you reconfigure, how do you retrain and reskill those people into the new tasks,” Bansal said.

“We’ve just retrained them in other areas of our operations team and what it has done is given us more scale,” Bansal said.

Developing a staff plan which takes into account automation requires HR to work more closely with different areas of the business.

“The best examples we’re seeing across our customers are when the head of transformation and the head of people work collaboratively in this area, leveraging a data-driven decision-making approach and connecting the digital transformation agenda with the people strategy,” said Greg Miller.

“We find the ‘transformation’ mantle either sits in a dedicated role or across CIO/CTO, COO or Strategy depending on the organisation.”

Gartner’s Boomer argues that HR needs to get better at anticipating the change and driving business towards the skills redeployment that it will need.

“It’s often [about] understanding key talent segments and how they are changing before the business even asks for new in-kind skills or a better approach to skills.”

Boomer said when it comes to workforce planning, most Australian organisations have a low level of maturity. To be able to keep up with rapid changes in technology, HR departments will need to get better at understanding what’s going on inside their four walls and the level of competition around key roles in the labour marketplace.

“The best organisations really do utilise external labour market data, as well as taking a hard look at the skills and capabilities that they have internally and then picking out what they’ll need in the future and how that will be impacted by the task automation,” he said.

The Author

Tess Bennett

Tess Bennett is the editor of Which-50 and is responsible for leading the publication’s daily coverage of Australia's digital businesses for C-Suite executives, strategists, founders and directors. As the former editor of Internet Retailing Australia and journalist for Inside Retail, Tess has five years experience covering retail and ecommerce. At Which-50 Tess reports on a broad range of topics including technology, the industrial internet, analytics and digital marketing.

Join the digital transformation discussion and sign up for the Which-50 Irregular Insights newsletter.

2018 Reader Survey

Which-50 Magazine

Must Reads

Reports surfaced this month that the Commonwealth Bank is facing legal action over the accessibility of its point of sale eftpos machine known as ‘Albert’. The news stands as a stark reminder that even the biggest companies, those with resources, compliance expertise – and according to the CBA – the